The average disposable household income increased by 2.2 per cent last year when compared with 2007, the latest figures from the Central Statistics Office show.
The CSO's Survey on Income and Living Conditions 2008highlights the importance of social welfare and other State benefits, with these payments accounting for more than 22 per cent of household income last year.
For the 10 per cent of households in the lowest income bracket, State benefits accounted for 88 per cent of the gross household income while they accounted for just seven per cent of income for the 10 per cent of households with the highest earnings.
The survey also found that more than 20 per cent of households were in arrears on payments such as bank accounts, mortgages, rent, credit cards and utility bills. Almost eight per cent of households had arrears of two or more types.
Households on lower incomes were more likely to report arrears on mortgage, rent or utility bills while those on higher incomes were more likely to have arrears on credit cards and overdrafts.
More than half of households where people were in consistent poverty reported at least one type of arrears.
To be in consistent poverty, a household's income must be less than 60 per cent of the average income threshold and its inhabitants must be experiencing deprivation of at least two items, such as going without heating at some stage or being unable to afford a warm waterproof coat.
The figures also show that one in seven people was at risk of poverty in 2008, down from one in six in 2007.
Children continued to be the category most at risk of poverty while people aged 75 and over had the lowest at risk of poverty rate of any age group.
EU comparisons were not possible for last year, as the EU figures are not available yet but the survey shows that Ireland's at risk of poverty rate was above the EU average in 2007. The average at risk of poverty rate for the EU was 16 per cent, compared with 18 per cent for Ireland.
Minister for Social and Family Affairs Mary Hanafin said the figures showed that social welfare payment increases had delivered a real difference in poverty rates.
"The evidence is that the priority given by Government in delivering real increases in social welfare payments in 2007 and 2008 has had a positive impact on alleviating consistent poverty in 2008," she said.
